West Africa’s Sahrawi Arab Democratic Republic (SADR) has delivered a stark warning to New Zealand importers after a South African court ruled on February 23 that a seized shipment of New Zealand-bound phosphate belongs the government-in-exile and not a state-owned Moroccan company.

Now up for auction, the US$5 million 55,000-ton cargo was impounded last May when the Marshall Islands-registered bulk carrier MV Cherry Blossom pulled into Port Elizabeth for refueling on its 27,000-kilometer voyage to New Zealand.

The phosphate was loaded at the Atlantic port of Laayoune in the former Spanish territory which was annexed by the Moroccan government in 1975 and where Rabat fought a prolonged desert war against independence-seeking Polisario Front guerrillas until a 1991 ceasefire.

South Africa’s High Court ruled Casablanca-based OCP never legally owned the phosphate and that it was not entitled to sell it to Balance Agri-Nutrients Ltd, one of two New Zealand firms that have been doing business with OCP since the early 1990s.

It is not clear at this point whether the South African decision will be used as a legal precedent among other countries sympathetic to the SADR.

Nor is the verdict’s impact on New Zealand’s phosphate dependent farming industry immediately apparent, though input costs could rise as phosphate-carrying ships take longer circuitous routes to avoid possible future seizures by South Africa around its Cape of Good Hope.

New Zealand Prime Minister Jacinda Ardern smiles as she answers a question during a media conference in Sydney, Australia, November 5, 2017.     REUTERS/David Gray
New Zealand Prime Minister Jacinda Ardern in a November 5, 2017 file photo. Reuters/David Gray

A significant portion of the proceeds from the sale of the shipment is likely to be eaten up by 299 days of berthage fees, but Kamal Fadel, SADR’s representative in Australia, says that was always secondary to the goal of securing ownership.

Last December, SADR President Brahim Ghali called on newly-appointed New Zealand Prime Minister Jacinda Ardern to stop importing phosphate from the western Sahara, saying it was a violation of international law.

“New Zealand companies risk legal action if they continue their illegal involvement in the plunder of Western Sahara resources,” Fadel told Asia Times.

“New Zealand companies and their assets will be targeted for the years of plunder of our resources. Shareholders should be wary and put pressure on the companies to end their involvement before it is too late.”

The New Zealand Fertilizer Association (NZFA) has said in the past that stopping the trade in phosphate would deny New Zealand farmers a source of high-quality fertilizer and impact on the livelihoods of many people in Western Sahara.

Sahrawis hold Polisario Front's flags during a ceremony to mark 40 years after the Front proclaimed the Sahrawi Arab Democratic Republic (SADR) in the disputed territory of Western Sahara on February 27, 2016 at the Sahrawi refugee camp of Dakhla which lies 170 km to the southeast of the Algerian city of Tindouf. SADR was declared in 1976 by the Polisario Front -- a rebel movement that wants independence for Western Sahara -- which fought a guerrilla war against Rabat's forces before a ceasefire in 1991.  / AFP PHOTO / Farouk Batiche
Sahrawis hold Polisario Front flags during a ceremony to mark 40 years after the Front proclaimed the Sahrawi Arab Democratic Republic (SADR) in Western Sahara Africa on February 27, 2016. Photo: AFP/Farouk Batiche

“We recognize that the Polisario want to increase public awareness of the political situation in Western Sahara,” an FTA spokesman said in response to the latest development, which SADR sees as a test case for further legal actions.

West Australian firm Wesfarmers stopped shipments from Morocco in 2012, four years after the Australia West Sahara Association began sending lobbyists to the firm’s annual meetings to convince the shareholders to look for alternative sources of supply.

Last November, a Panama court dismissed a similar case involving a phosphate shipment passing through the Panama Canal aboard the Panamanian-flagged Ultra Innovation, saying there was no evidence SADR owned the cargo the vessel was carrying to Vancouver.

Canada remains the world’s biggest importer of Moroccan phosphate, but publicly-traded Nutrien Ltd, its largest supplier of agricultural inputs, announced last month the firm had given notice it will end shipments from Western Sahara by the end of the year.

The shareholders of Ballance and Ravensdown Fertilizer, which together import 450,000 tons of Western Sahara phosphate a year, have so far held firm, saying the Moroccan product fits with their superphosphate recipe.

New Zealand’s widespread use of superphosphate, or chemically-treated phosphate, spurred a massive surge in its agricultural productivity, particularly with the advent of aerial topdressing in the late 1940s.

A phosphate factory in Morocco. Photo: iStock/Getty Images
A phosphate factory in Morocco. Photo: iStock/Getty Images

Future shipments to New Zealand and Canada will now have to take a different route around South America’s Cape Horn. “An expected result of the Panama and South African cases was to force the buyer to make continuous and often very long sea voyages,” Fadel said.

Even then, an emboldened SADR government has warned charter companies and other shipping interests to “insulate” themselves and their ships from “prospective liability and compensation proceedings.”

The United Nations considers the Polisario Front and the SADR to be legitimate representatives of the 570,000 Sahrawi tribesmen of mixed Arab, Moor, Berber and Taureg heritage who, it asserts, have a right to self-determination.

South Africa is among 44 states that support Polisario’s claims of sovereignty, while another 43 – including New Zealand — say the Sahrawis, many living in refugee camps along the Algerian border, should be allowed to vote on their future.

Founded in 1920, Morocco’s state-owned The OCP Group is the world’s largest exporter of phosphate rock, controlling 30% of the world market share, and a major producer of phosphoric acid, earning annual revenues of more than US$5 billion.

While China also supplies India, along with Japan, Vietnam and much of the East Asian market, the sub-continent is still OCP’s largest Asian customer, importing 1.1 million tons of West Saharan phosphate a year aboard ships that pass through the Suez Canal.